Investment Committee Memo Sample: A Full Walkthrough of Each Section

An investment committee memo is the written recommendation a deal team sends to the partners who vote on a deal. It sets out the thesis, the numbers, the terms, the risks and a clear yes or no. This investment committee memo sample walks through each section in order, using two memos that have been made public: Sequoia's 2005 YouTube memo and Bessemer's 2010 Shopify memo. For each section you get what to write, what a good version looks like, and what to fix before the IC meeting.

What an Investment Committee Memo Sample Should Contain

Most IC memos follow the same order, whether the fund does buyouts or seed deals. Finance Context's private equity guide lists the usual back half of a buyout memo as financial analysis (2 to 3 pages), deal terms and structure (1 page), returns analysis (1 page), risk factors (1 page) and a recommendation. Visible.vc's guide to venture memos puts market, team and product in front of the financials. Put those together and you get the standard order:

Header and deal snapshot
Recommendation and investment thesis
Market and competition
Company, team and product
Financial analysis
Deal terms and structure
Returns or outcomes analysis
Key risks and mitigants
Open diligence items and next steps

The published memos stick closely to this order. Bessemer's Shopify memo, dated October 12, 2010, runs through market opportunity, customers and pricing, product, customer acquisition and retention, competition, team, summary financials, deal terms and outcomes analysis. Roelof Botha's Sequoia memo on YouTube, dated September 2, 2005, opens with the introduction, deal, competition, hiring plan, key risks and recommendation, then puts the detail in supporting sections.

Takeaway: fix the section order in your template before anyone starts writing. If every memo arrives in the same shape, partners can compare deals side by side and don't have to hunt for the terms page.

Header, Recommendation and Thesis: The First Page of the Memo

The header table

Start with a one-screen table so any partner can read the deal in 30 seconds. Include:

Company name, sector, HQ and founding year
Round or transaction type (seed, Series A, platform buyout, add-on)
Check size, pre-money value or enterprise value, and resulting ownership
Lead partner, deal team and date of the IC meeting
The vote requested, in one line

The recommendation

State the ask up front. Botha's YouTube memo states the structure at the start: a $1 million seed investment followed by a $4 million Series A once specific milestones were met, which would leave Sequoia with roughly 30% ownership after the Series A and an employee pool of about 17%. That is the right level of detail. The committee knows the dollars, the staging and the stake before reading anything else.

The thesis

Give three or four numbered reasons the deal will make money, each one testable. "Large market" can't be tested. "Monthly recurring revenue grew 151% year over year with 7 to 9 month CAC payback" can. Every thesis point should link to evidence later in the memo, and every later section should support at least one thesis point. If a section supports none of them, cut it.

Takeaway: write the recommendation and thesis last and put them first. Once the rest of the memo is drafted, rewrite page one so a partner who reads only that page could still vote.

Market, Company and Financials: The Evidence Sections

Market and competition

Size the market bottom-up: number of buyers times what each pays. Then name the competitors. Bessemer's Shopify memo named Volusion, BigCommerce and Magento directly and did not hide that many VCs saw Shopify's SMB focus as risky. Naming the firms that could beat you is more credible than a two-by-two chart with your target alone in the top-right corner.

Company, team and product

Cover what the product does and who pays for it, then say plainly where the team is weak. The Shopify memo said the founding team was fairly inexperienced and would need senior hires, especially a marketing leader. Sequoia's YouTube memo included a hiring plan in its opening section. When the IC can see the gaps, it can make the hires a condition of the deal instead of discovering the problem after closing.

Financial analysis

This is where the thesis gets proved or disproved. The Shopify memo is a good model because it gives the unit economics as ranges and states the period for each:

Customers grew from 5,500 to 10,000 year over year (+81%)
Monthly recurring revenue rose from $164K to $438K (+151%)
Annualized GMV reached $132 million, with the average customer paying $45 a month
Customer acquisition cost of $175 to $225, with a 7 to 9 month payback
Monthly churn settling at 3% to 5%, after a 25% drop-off by month 3

The early-churn figure matters. A weaker memo would have reported only the blended churn rate. Showing the drop-off by month 3 tells the committee exactly which risk it is taking on. In a buyout memo the same section becomes a bridge from historical EBITDA to adjusted EBITDA, a cash conversion table and a debt capacity summary.

Takeaway: for every metric, give the number, the time period and the direction. Build the tables in a linked Excel template so that when diligence changes an input, the memo's figures update with it.

Deal Terms and the Returns Analysis

Deal terms and structure

List every term that affects value or control. The Shopify memo's term summary is short and complete:

$5 million at a $25 million pre-money valuation
13.5% ownership after the option pool
1x non-participating ("straight") preferred
Two of five board seats
The right to force a sale after six years
An option to buy $2 million of common from a departing co-founder at a 25% discount

The memo also records a negotiation the fund lost. Bessemer wanted structure in the deal to protect its return if Shopify sold for $50 million, and Tobi Lütke pushed for a clean deal instead. Put terms you conceded in the memo too. The committee should approve the deal that was actually agreed, not the one you opened with.

Returns or outcomes analysis

Show at least three scenarios and state the assumption that drives each. Bessemer's Shopify cases were a bear case of $50 to $75 million, a base case of $250 million and a bull case of $1 billion or more. Sequoia modelled YouTube's revenue on three explicit inputs:

10 million daily videos, $10 CPM, 15% monetized, giving $6 million a year
20 million daily videos, $15 CPM, 20% monetized, giving $22 million a year
30 million daily videos, $20 CPM, 25% monetized, giving $55 million a year

Both memos badly underestimated the upside, and neither firm hid it afterwards. Bessemer's note on the published memo says the upside case was off by more than two orders of magnitude. On October 9, 2006, about 13 months after Botha's memo, Google agreed to buy YouTube for $1.65 billion in stock. At that point YouTube was already serving more than 100 million video views a day, more than three times the memo's best case. When Sequoia auctioned the memo as an NFT, it pointed out that YouTube now serves 5 billion videos a day.

For a buyout, use the same three-case layout with entry multiple, leverage, EBITDA growth and exit multiple as the inputs, and MOIC and IRR as the outputs. Test your math with a quick check. A 2.5x MOIC over five years works out to about a 20% IRR, because 2.5 to the power of one-fifth is roughly 1.20. Add a sensitivity grid of exit multiple against EBITDA growth so the committee can see at a glance where returns fall below the fund's hurdle rate.

Takeaway: put the driver assumptions next to every scenario result. A partner who disagrees with a CPM or an exit multiple should be able to find it in seconds and argue about it directly.

Risks, Mitigants and Diligence: The Section Partners Read Twice

The risk section is where most partners start testing your judgement. Botha's YouTube memo listed five risks in plain words:

Competition and defensibility, given several rival video sites
The revenue model, including which ad formats would work and what share of views could be monetized
Scalability of infrastructure under the projected growth
Balancing growth against content depth so users were not disappointed
Exit risk, given few comparable exits at large valuations

Each risk needs a mitigant and an owner. Where there's no real mitigant, say so and explain why the return still justifies the risk. Use a three-column table with risk, how likely and how severe, and mitigant or diligence step.

Run a premortem before the memo goes out

Gary Klein's September 2007 Harvard Business Review article, "Performing a Project Premortem," describes a method that works well at this stage. The team assumes the project has already failed and writes down the reasons it failed. Klein cites research showing that this kind of prospective hindsight improves people's ability to identify the right reasons for a future outcome by 30%. For an IC memo, give the deal team 10 minutes to write down why the investment lost money three years from now, then check the risk table against their list. Any failure reason that isn't in the table goes in.

Takeaway: end the memo with a numbered list of open diligence items, each with an owner and a date, and tie approval to closing them. That way the committee can give a conditional yes without having to reject the whole deal.

How to Build Your Own Investment Committee Memo Sample Step by Step

Here is a drafting sequence that fits a two-week diligence sprint:

Day 1: Fill in the header table and a draft three-point thesis. Treat the thesis as a set of hypotheses to test.
Days 2 to 5: Build the spreadsheet model: historical financials, unit economics or EBITDA bridge, and the three-case returns tab.
Days 5 to 7: Write the market, competition and team sections. Name every competitor and every gap in the team.
Day 8: Run the premortem and draft the risk table with mitigants.
Day 9: Write up the deal terms, including anything you gave up in negotiation.
Day 10: Rewrite page one (recommendation and thesis) based on what the diligence found.
Days 11 to 12: Have a partner outside the deal team try to argue against it, then revise.
48 hours before IC: Circulate the memo so partners have time to read it before the meeting.

Aim for 8 to 12 pages plus appendices. Visible.vc's guide says the memo should bring market analysis, projections, competitive position and risk together into a short recommendation. Any exhibit the vote does not depend on goes in an appendix.

Takeaway: save the finished memo and the committee's decision together. After 20 deals you'll have a record of which risks actually happened and how far off your base cases were, which is the best way to improve the next memo.

Put a Ready-Made Template to Work

The Sequoia and Bessemer memos show the same things. They state the ask on page one, give numbers with time periods attached, name competitors, set out several return scenarios with visible inputs, and list risks the authors had no answer to yet. None of that is hard to do. The hard part is doing it every time under deal pressure, when an analyst is formatting tables at midnight before the IC meeting. A pre-built investment committee memo template with a linked Excel returns model, a standard risk table and a fixed section order takes care of formatting and consistency, so your team's time goes into the analysis. Start from the template, fill it in section by section using the steps above, and send the committee a memo it can vote on.